By: Schwertner, Cook  S.B. No. 815
         (In the Senate - Filed January 16, 2025; February 7, 2025,
  read first time and referred to Committee on Business & Commerce;
  March 13, 2025, reported adversely, with favorable Committee
  Substitute by the following vote:  Yeas 9, Nays 2; March 13, 2025,
  sent to printer.)
Click here to see the committee vote
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 815 By:  Schwertner
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to the use of certain automated systems or personnel in,
  and certain adverse determinations made in connection with, the
  health benefit claims process.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter D, Chapter 843, Insurance Code, is
  amended by adding Section 843.114 to read as follows:
         Sec. 843.114.  CERTAIN DISCLOSURES REQUIRED IN EXPLANATION
  OF BENEFITS.  A health maintenance organization shall include in a
  written explanation of benefits provided to an enrollee and a
  physician or health care provider:
               (1)  a disclosure stating whether artificial
  intelligence was used in any part of the claims process, including
  coverage determinations and utilization review; and
               (2)  if applicable, a plain language description of the
  method by which the health maintenance organization or utilization
  review agent used artificial intelligence.
         SECTION 2.  Subchapter A, Chapter 1301, Insurance Code, is
  amended by adding Section 1301.011 to read as follows:
         Sec. 1301.011.  CERTAIN DISCLOSURES REQUIRED IN EXPLANATION
  OF BENEFITS.  An insurer shall include in a written explanation of
  benefits provided to an insured and a physician or health care
  provider:
               (1)  a disclosure stating whether artificial
  intelligence was used in any part of the claims process, including
  coverage determinations and utilization review; and
               (2)  if applicable, a plain language description of the
  method by which the insurer or utilization review agent used
  artificial intelligence.
         SECTION 3.  Section 4201.002, Insurance Code, is amended by
  amending Subdivision (1) and adding Subdivisions (1-a), (1-b), and
  (1-c) to read as follows:
               (1)  "Adverse determination" means a determination by a
  utilization review agent that health care services provided or
  proposed to be provided to a patient are not medically necessary or
  appropriate or are experimental or investigational.
               (1-a)  "Algorithm" means a computerized procedure
  consisting of a set of steps used to accomplish a determined task.
               (1-b)  "Artificial intelligence system" means any
  machine learning-based system that, for any explicit or implicit
  objective, infers from the inputs the system receives how to
  generate outputs, including content, decisions, predictions, and
  recommendations, that can influence physical or virtual
  environments.
               (1-c)  "Automated decision system" means an algorithm,
  including an algorithm incorporating an artificial intelligence
  system, that uses data-based analytics to make, support, suggest,
  or recommend certain determinations, decisions, judgments, or
  conclusions.
         SECTION 4.  Subchapter D, Chapter 4201, Insurance Code, is
  amended by adding Section 4201.156 to read as follows:
         Sec. 4201.156.  USE OF AUTOMATED DECISION SYSTEM FOR ADVERSE
  DETERMINATIONS. (a)  A utilization review agent may not use an
  automated decision system in any way to suggest, recommend,
  generate, provide, make, or assist in making, wholly or partly, an
  adverse determination.  As provided by and subject to Section
  4201.254, only an appropriate physician, dentist, or other licensed
  health care provider may make an adverse determination in
  accordance with Section 4201.254.
         (b)  The commissioner may audit and inspect at any time a
  utilization review agent's use of an automated decision system for
  utilization review.
         (c)  This section does not prohibit the use of an automated
  decision system for administrative or fraud-detection functions in
  connection with utilization review.
         SECTION 5.  Subchapter F, Chapter 4201, Insurance Code, is
  amended by adding Section 4201.254 to read as follows:
         Sec. 4201.254.  PERSONNEL REQUIRED FOR ADVERSE
  DETERMINATION. (a)  An adverse determination must be made by an
  appropriate physician, dentist, or other health care provider who
  is:
               (1)  an individual licensed in this state under Title
  3, Occupations Code; and
               (2)  acting in accordance with the laws of this state
  including requirements under Section 4201.252 and within the scope
  of the individual's applicable license issued under Title 3,
  Occupations Code.
         (b)  Notwithstanding any other law, for a health care service
  ordered, requested, provided, or to be provided by a physician, an
  adverse determination must be made by a physician with a permanent
  unrestricted license to practice medicine in this state who is of
  the same or similar specialty as the physician who ordered,
  requested, provided, or proposes to provide the service.
         (c)  Nothing in this section authorizes an individual to act
  outside of the scope of the individual's applicable license issued
  under Title 3, Occupations Code.
         SECTION 6.  Section 4201.303(a), Insurance Code, is amended
  to read as follows:
         (a)  Notice of an adverse determination must include:
               (1)  the principal reasons for the adverse
  determination;
               (2)  the clinical basis for the adverse determination;
               (3)  a description of and [or] the source of the
  screening criteria and review procedures used as guidelines in
  making the adverse determination; and
               (4)  a description of the procedure for the complaint
  and appeal process, including notice to the enrollee of the
  enrollee's right to appeal an adverse determination to an
  independent review organization and of the procedures to obtain
  that review.
         SECTION 7.  (a) Sections 843.114 and 1301.011, Insurance
  Code, as added by this Act, apply only to the provision of a health
  care service under a health benefit plan delivered, issued for
  delivery, or renewed on or after January 1, 2026.
         (b)  Chapter 4201, Insurance Code, as amended by this Act,
  applies only to utilization review conducted for a health benefit
  plan delivered, issued for delivery, or renewed on or after January
  1, 2026.  Utilization review conducted for a health benefit plan
  delivered, issued for delivery, or renewed before January 1, 2026,
  is governed by the law as it existed immediately before the
  effective date of this Act, and that law is continued in effect for
  that purpose.
         SECTION 8.  This Act takes effect September 1, 2025.
 
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